1.

(02.07 LC) Which of the following describes a positive externality? (4 points)

	Unintended benefits to people not involved in a choice
	Unintended costs to people not involved in a choice
	Benefits experienced by the people who make a choice
	Costs experienced by the people who make a choice

2.

(02.06 MC) Why are wages and salaries generally determined by the market for labor? (4 points)

	The forces of supply and demand must be controlled by government regulation.
	Other than minimum wage, the government does not determine pay for various jobs.
	Business firms have absolute control over wages of workers in the market for labor.
	The market for labor is the same as its related product market, so wages must match prices.

3.

(02.07 MC) Air Emissions Sites

\fA - - - Price B - - O QuantityP1 2 Price Q1 QuantityQuantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost Profit or Loss (TR - TC) $20 $20 $14 2 $19 $38 $24 3 $18 $54 $39 4 $17 $68 $61 5 $16 $80 $95\fGovernment A B P Household Product Factor Financial Market C K Market Markets I H Business N Q Firms F Rest of the M World